HONOLULU — A Maui judge's ruling Tuesday resolves a critical roadblock to finalizing a $4 billion wildfire settlement: Insurance companies who have paid out more than $2 billion in claims can seek reimbursement only from the settlement amount defendants, who victims blame for causing the deadly tragedy, have agreed to pay.
Lawyers representing plaintiffs in hundreds of lawsuits over the deaths and destruction caused by the fires asked the judge to bar insurers from bringing independent legal action to recoup the money paid to policyholders. Preventing insurers from going after the defendants is a key settlement term.
The settlement was reached earlier this month, days before the one-year anniversary of the the fires, amid fears that Hawaiian Electric, the power company that some blame for sparking the blaze, could be on the brink of bankruptcy. Other defendants include Maui County and large landowners.
The federal Bureau of Alcohol, Tobacco, Firearms and Explosives is investigating the Aug. 8, 2023, fires that killed 102 people, destroyed the historic downtown area of Lahaina, burned thousands of homes and displaced 12,000 people.
Plaintiff lawyers were worried allowing insurers to pursue reimbursement separately would be a deal-breaker, drain what is available to pay fire victims and lead to prolonged litigation.
A group of more than 160 property and casualty insurers that have so far paid more than $2.34 billion to people and businesses devastated by the fires remained as holdouts to the settlement.
Jesse Creed, an attorney serving as one of four liaisons for the coordination of the plaintiffs' lawsuits, told Cahill the insurers want to get court judgements for enormous damages, "and leave a carcass for the plaintiffs.''
Insurer lawyers argued in court filings that what they called the rush to push through a settlement deprives the insurers of their due process.
